The intrinsic value of an option

A) is equal to the option premium.
B) is the amount the option actually is worth if it is immediately exercised.
C) is the amount the option is expected to be worth on its expiration date.
D) is impossible to determine in the absence of information on the future prices of the underlying asset.


B

Economics

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A fundamental aspect of economics is to

A) ensure that every firm makes a profit. B) analyze how choices are made. C) satisfy all our wants. D) make sure that our resources will always be unlimited.

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Which of the following represents the general rule of hiring for a firm?

A) Total physical product equals marginal factor cost. B) Average revenue product equals the wage rate. C) Marginal cost equals marginal revenue. D) Marginal revenue product equals marginal factor cost.

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In a market system, the major coordination tasks are carried out

a. with the approval of central planners. b. as part of the regular appropriation process of Congress. c. irregularly by the major corporations. d. automatically by the market mechanism.

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Approximately 50,000 luxury boats (priced $100,000 or more) are currently produced each year. Using the economic way of thinking, how much revenue would the government actually generate with a $10,000 excise tax on luxury boats?

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Economics